Globalization Can Turn Back Terror

Globalization Can Turn Back Terror

by Joseph Nye
November 18, 2001
Reprinted from the Boston Globe

"The terrorists attacked the World Trade Center,'''' said President Bush, ''''and we will defeat them by expanding and encouraging world trade.'''' When the US trade representative, Robert Zoellick, began making this argument after Sept. 11, he was accused of making a tangential connection in a bid to lobby Congress for expanded trade authority. But his argument is not so far-fetched as critics imply.

Even some critics of globalization make the connection. John Gray of the London School of Economics argues that after Sept. 11, ''''the entire view of the world that supported the market''s faith in globalization has melted down'''' and ''''a genuine rejection of Western modernity'''' lies behind the terrorist attacks. But while that may be true for the fundamentalists of Al Qaeda, it is doubtful that the majority of people in the Middle East, much less Asia, Latin America and Africa, have given up aspirations for a better standard of living.

Of course, economic globalization has been reversed before in recent history. The high levels of global economic integration reached in the 19th century declined in the world wars and the Cold War of the 20th century. The world did not regain its 1914 levels of economic integration until the early 1970s. And lurking behind the political disruptions of the last century was a failure to cope with the rising inequality that contributed to the rise of the mass social movements of communism and fascism. The advent of the welfare state after 1945 created a vital safety net in developed countries but not in the poorer parts of the world. Poverty and inequality are not the only sources of the discontent that underlies terrorism, but they remain a factor.

Trade is not a panacea for growth. Initially it may increase inequality even while it improves standards of living. Rich countries must consider a panoply of instruments to foster development. Most of the poorest countries in the world have suffered from misrule, corruption, and inept economic policies.

However, several countries in East Asia that were equally poor in the 1950s used networks of globalization to greatly increase their wealth and status in the world economy. Although free trade is not alone sufficient, it is difficult to find any countries that have prospered while closing themselves off from globalization.

Contrast Burma or North Korea with China, a poor country that has been growing fast since its leaders decided to open their economy in the 1980s. China''s ''''human development index'''' as calculated by the United Nations - reflecting life expectancy, educational attainment, and GDP per capita - showed dramatic gains.

Hundreds of millions of Chinese were made better off by market reforms and globalization; but hundreds of millions of others, particularly in the western parts of the country, saw little or no gain. And some will be made worse off, particularly as China exposes inefficient state-owned enterprises to international competition under the terms of its accession to the World Trade Organization. But poverty existed before China''s opening, and if China wishes to improve its peoples'' standard of living, it is hard to see a better alternative. Failure to implement the preliminary agreement reached at Doha, Qatar, last week would make the problems of the world''s poor worse, not better. Trade will not alone banish the conditions that foster terrorism, but it is one step in the right direction.
Ironically, a resurgence of protectionism in the aftermath of the terrorist attacks would not mean the end of the global networks of interdependence that are shrinking the importance of distance in our world. Economic globalization might be curtailed, but military and ecological globalization would continue apace.

When economic integration was halted in 1914, two world wars brought military interdependence at global distances. And when terrorists based on the other side of the world attacked the Pentagon, that is a form of military globalization. Similarly, the spread of the AIDS virus or global climate change will not be halted by the rise of tariff barriers.

It would be ironic if the failure to execute the preliminary agreements reached at Doha deprived both rich and poor of one of the beneficial aspects of globalization while leaving its malign dimensions largely untouched.

Joseph S. Nye is dean of the Kennedy School of Government at Harvard University and co-author of ''''Governance in a Globalizing World.''''